Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Is Boston Beer Company Inc (NYSE:SAM) a good stock to buy now? Money managers are buying. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings moved up by 3 lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as WESCO International, Inc. (NYSE:WCC), Armstrong World Industries, Inc. (NYSE:AWI), and Zynga Inc (NASDAQ:ZNGA) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What have hedge funds been doing with Boston Beer Company Inc (NYSE:SAM)?
At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 23% rise from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SAM over the last 5 quarters, which has consistently trended downwards, save for the latest quarter’s small rebound. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Tybourne Capital Management, led by Eashwar Krishnan, holds the number one position in Boston Beer Company Inc (NYSE:SAM). Tybourne Capital Management has a $141.5 million position in the stock, comprising 7.1% of its 13F portfolio. On Tybourne Capital Management’s heels is Ken Fisher of Fisher Asset Management, with a $54.1 million position. Other hedge funds and institutional investors that hold long positions include Shane Finemore’s Manikay Partners, Cliff Asness’ AQR Capital Management, and Israel Englander’s Millennium Management. We should note that top shareholder Tybourne Capital Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.